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A Case for Valuing Twitter at $2.7 Billion

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WSJ Staff

Sep 17, 2009 6:27 pm ET

Another day, another Twitter valuation. The latest one being bandied about for the popular site is $1 billion.

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Of course, there is a long history of famously overvalued Internet start-up businesses. The $15 billion value once applied to Facebook and the $2.6 billion valuation of Skype four years ago come quickly to mind.

The problems are legion. First, it is often difficult to come up with comparables (there has never been anything quite like Twitter) and the valuations often come before such important standards as, say, profits, so investors are left valuing a business based on such metrics as future revenue. Continue reading on Deal Journal